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9/30/15
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TruAmerica Multifamily, in partnership with a consortium of institutional investors including Allstate and the Guardian Life Insurance Company, completed the purchase of a seven-property multifamily portfolio with assets located in Seattle, WA, Portland, OR and Salt Lake City, UT, for a total of $255 mil. The seller was Philadelphia-based Equus Capital Partners Ltd.
The 1,829-unit portfolio includes Ridgegate in Kent, WA; Alderwood Park in Lynnwood, WA; Ridgetop and Wellington, both in Silverdale, WA; Boulder Creek and Bridge Creek, both in Wilsonville, OR; and Settler’s Point in Salt Lake City, UT.
The acquisition adds 1,413 units in suburban Seattle and Portland to the Los Angeles-based investor’s rapidly expanding Pacific Northwest portfolio, which is expected to be well over 6,000 units by the end of the year. With today’s closing, TruAmerica, one of the most active buyers of multifamily assets in the United States, has invested more than $500 mil in the Pacific Northwest since June.
The region has seen some of the best job growth metrics nationwide in its metropolitan areas, such as Seattle, where employers including Boeing, Amazon.com, Microsoft and Google helped reduce the city’s unemployment rate to 3.6 percent in August. That’s well below the national rate of 5.1 percent, according to Washington Employment Security Department data.
Like Seattle, Portland benefits from a diverse array of economic drivers, which have propelled the city to become the 6th highest-performing metropolitan area in the nation with a 3.1 percent market vacancy rate, according to rental data company Axiometrics Inc.
The multifamily portfolio also included the 416-unit Settler’s Point in Salt Lake City, another top-performing market, which complements the Crossing at Daybreak, a 315-unit apartment home community in South Jordan, UT, which was acquired by the firm in May.
“The transaction is our third portfolio acquisition with our partners at Guardian and Allstate in the past 15 months, representing 7,000 units spanning five states with an aggregate value of more than $1 bil,” said Robert Hart, President and Chief Executive Officer at TruAmerica. “This portfolio exemplifies our investment philosophy and our favorable outlook on the Class B rental sector.”
TruAmerica’s value-add investment strategy focuses on assets located in suburban communities close to these types of high-growth urban markets in the western United States, where newer construction has priced out many renters. While the company considers opportunities in downtown areas on a selected basis, 80 percent of its transactions take place just outside of the urban core.
“Urban living attracts many 18- to-34-year-olds in places like Seattle and Portland, but there are young families in these markets looking for a little more space, lower rents, good quality school systems and accessibility to major employers. We think these suburban properties will present attractive and affordable options for these young families and older residents alike,” said Edgar Alvarado, Group Head of Real Estate for Allstate.
TruAmerica will invest more than $30 mil across the portfolio to extensively renovate the properties’ amenities, including making significant upgrades to the existing clubhouses, fitness centers and landscaping. The scope of work also will include attractive renovations to unit interiors with the addition of new faux wood flooring and carpet, countertops, appliance packages, and washers and dryers at specific properties.
“This portfolio fits perfectly into our value-add investment strategy. We were able to acquire the properties significantly below replacement cost, which will allow us to create a high quality yet affordable option for working class families and young professionals,” said Robert LoCascio, Managing Director of Guardian’s Real Estate Investments group.
Brian Eisendrath and Cameron Chalfant of CBRE Capital Markets arranged the financing on the PNW properties, while Allan Freedman and Ed Zimbler of Berkadia arranged the Salt Lake City property financing.
Jon Hallgrimson, Eli Hanacek, Frank Bosl, Graham Taylor and Carrie Kahn of CBRE and Greg Barratt of Berkadia represented both the buyer and seller in the transaction.
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